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POLITICO 44

The feds committed $12.5 billion to Chrysler and of that amount, $11.2 billion has been paid through principal repayments, interest and cancelled commitments, the Treasury Department said.

The sale of the government’s 6 percent share of the company also marks the end of the government’s bailout of the industry begun in 2009.

The Treasury Department said in a statement that it was unlikely to recover the $1.3 billion loss, but hailed the Chrysler sale as faster than expected progress in buoying a beleaguered industry and protecting U.S. jobs.

“With today’s closing, the U.S. government has exited its investment in Chrysler at least six years earlier than expected,” said Assistant Secretary for Financial Stability Tim Massad. “This is a major accomplishment and further evidence of the success of the Administration’s actions to assist the US auto industry, which helped save a million jobs during the worst economic crisis since the Great Depression.”

The department also emphasized that the predicted cost of the bailout had significantly decreased since the program was rolled out in 2009. Some estimates now predict that the bailout programs – which includes other industries in addition to car manufacturers – might even turn a profit.

“The news about the cost number is that it’s fallen,” Massad told POLITICO. “The CBO projected in June of 2009 that 73 percent would be lost in the auto industry rescue. Now that figure has come down to 17 or 18 percent. We invested a total of $80 billion, and we now estimate a loss of $14 billion, subject of course to market conditions.”

House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) blasted the announcement that taxpayers had absorbed a loss on the deal with Chrysler, likening the deal to a giveaway to a foreign firm.

“This deal gives Fiat another channel for Italian-made cars to be sold and will let them receive a reliable revenue stream from American consumers for years to come, all with little or no money invested in the deal in the first place,” Issa said in a statement.

Through the partnership with Fiat, Chrysler has managed to engineer an automotive comeback with stronger sales and redesigned models.

In May, the company posted its first profit since emerging from bankruptcy in 2009, and media reports indicate that the company is planning an initial public offering early next year. In June, Chrysler announced that sales rose 30 percent compared to the same period last year.

Fiat has provided the Detroit automaker with much needed expertise in the small car market and has aided the company in increasing production fuel efficient models. Chrysler’s current CEO is a Fiat transplant, Sergio Marchionne, and has guided the company along a path of re-engineering its fleet of cars and paying back government loans granted during the financial crisis.

Fiat will assume a 57% stake in Chrysler once the company meets an agreement with the Obama administration that it will produce a 40 mile per gallon car in the United States.

The money the IRS has collected in taxes from Chrysler workers has more than paid for the $1.3 billion. Gravy................... The money we saved in unemployment compensation has more than paid for the $1.3 billion. Gravy ............... The plants that stayed open and paid their property taxes. Gravy ......... The town that didn't become ghost towns, have you ever seen a town that suffered a major plant closing. Gravy ........ The houses that weren't foreclosed on by banks. Gravy ............. The cars that weren't repossessed from workers. Gravy ............. The retired workers that didn't have to go on Medicaid. Gravy ......... The workers that didn't have to go on Welfare.

All in all you now could agree that the US saved itself billions of dollars and we are building solid citizens with jobs and paying income tax and saved all the subsidiary industries, like the Glass industry and other suppliers.

Chicago, its quite ironic that you think others are so misinformed...when in fact your logic leaves much to be desired. You must not be a student of economics, because if you were, you would understand that Chrysler should have gone out of business. Other, better managed compainies would have taken Chrysler's market share. The new, more "secure" jobs, would most likely have gone to Ford, or to US subsidiaries of foreign manufacturers such as Honda/Toyota/BMW that operate in the states. Can you explain how on earth Ford came out of this mess at a competitive disadvantage (other than public opinion)? In a non-statist world, Ford makes out like gangbusters because of its more prudent management. Instead, we get a government response that allows it to break contracts, renegotiate them, as well as pick winners/losers inside of the capital structure. The only gravy I like is on my Thanksgiving turkey.

Chicago, its quite ironic that you think others are so misinformed...when in fact your logic leaves much to be desired. You must not be a student of economics, because if you were, you would understand that Chrysler should have gone out of business.

Oh how wrong you are, I'm a student of economic and you are a student of ideology, there is no room for ideology in economics pall. Here you are brooding about Chrysler is alive and well and responsible for revitalizing the American economy and providing over 250,000 jobs.

For me I'm celebrating that we have a strong and vibrant company employing and supporting over 250,000 workers all paying income taxes.

Seems like these days TeaParty Republicans think all America need to feed on is ideology, why don't you go and tell that to the over 100,000 workers Chrysler is now supporting, tell them the Republican party needs them to quite their jobs and collect unemployment.

This is sooooo funny. The very few conservatives that are commenting on this great story are so p'o'd that the auto industry loans are repaid and the companies are expanding and re-hiring that they have come on this blog and just....well.... lets just say MAKE THINGS UP. We don't have to comment because anyway you slice it AGAIN LIBERALS/DEMOCRATS were RIGHT!!! And we know how much you guys hate it when we're right which is most of the time... My satisfaction is knowing how many of you are stewing in your own hatred for America(ns).. Have a Great Day!!!

Chicago, I will give you that on a very short-term basis your analysis holds water. I'm just suggesting that on a longer term basis you can miss the forest for the trees. We are being set up for a failure of unthinkable (at the moment) destruction. If you analyze each successive financial bailout over the last 100 years, you will see that it is taking a greater and greater government response to stem the tide of deflation that wants to take root. Government cannot stand the idea of deflation for a myriad of reasons, which, if you are a student of fiat currency and debt feuled "growth", then you will understand. Sooner or later, people, despite the government stimulus, will not be incentivized to make capital investments given the lay of the land at that time. I don't want this to happen, but it is a natural byproduct of what has been happening at a macro level for decades.

RU, how sad it is that you have to jump to a hatred for America. How about contributing to the discussion instead of relying on the tired conservative/liberal debate. What I find sooooo funny is that the only ideology in Washington has been to run up debt. In fact both parties are responsible, with a majority of the responiblity belonging to the Republicans. I would be willing to bet that you think GWB was a "conservative". Just as I believed it wrong for Republicans to be running up perpetual budget deficits, I also believe it wrong to be running 1.6T deficits now. If you are a student of economics, Keynes ideas have been *******ized by the politicians. Keynes believed in deficit spending in times of poor aggregate demand. But his assumptions were that in good times, these deficits would be amortized down. Nothing could be further from the truth during the last 30 years.

Dont forget about the thousands of jobs at other companies whos main customer is GM or Chrysler. My mom lost her job (under Bush reign I might add) at a filter factory. This plants main customer was GM. They sent 2 lines to Germany because there wasnt enough orders here in the US. The plant still hasn't recovered and is in the prosess of sending the rest of the jobs over the pond.

Too many misinformed comments here, when you figure: The money the IRS has collected in taxes from Chrysler workers has more than paid for the $1.3 billion. Gravy................... The money we saved in unemployment compensation has more than paid for the $1.3 billion. Gravy ............... The plants that stayed open and paid their property taxes. Gravy ......... The town that didn't become ghost towns, have you ever seen a town that suffered a major plant closing. Gravy ........ The houses that weren't foreclosed on by banks. Gravy ............. The cars that weren't repossessed from workers. Gravy ............. The retired workers that didn't have to go on Medicaid. Gravy ......... The workers that didn't have to go on Welfare. All in all you now could agree that the US saved itself billions of dollars and we are building solid citizens with jobs and paying income tax and saved all the subsidiary industries, like the Glass industry and other suppliers.

This deal like all the stupid deals Obie has done has proven to be a disaster. The italian government bought into Chrysler to get at its distribution market to spread their vile little FIATS around America again. This disaster was driven by the idiot environmentalists and socialist thugs in the unions.

The feds committed $12.5 billion to Chrysler and of that amount, $11.2 billion has been paid through principal repayments, interest and cancelled commitments, the Treasury Department said.

The cancelled commitment or forgiven debt total is?

TeamPOLITICO: Jul. 21, 2011 - 2:43 PM EST

The Treasury Department said in a statement that it was unlikely to recover the $1.3 billion loss, but hailed the Chrysler sale as faster than expected progress in buoying a beleaguered industry and protecting U.S. jobs.

$1.3 Billion

The department also emphad that the predicted cost of the bailout had significantly decreased since the program was rolled out in 2009. Some estimates now predict that the bailout programs – which includes other industries in addition to car manufacturers – might even turn a profit.

“The news about the cost number is that it’s fallen,” Massad told POLITICO. “The CBO projected in June of 2009 that 73 percent would be lost in the auto industry rescue. Now that figure has come down to 17 or 18 percent. We invested a total of $80 billion, and we now estimate a loss of $14 billion, subject of course to market conditions.”

The fatal flaw in your logic is the assumption that GM and Chrysler would have liquidated without Obama's infusion of taxpayer dollars. The true alternative was Chapter 11 bankruptcy proceedings that work perfectly well for many other large companies (United and Delta are examples). Both companies and their suppliers would still be in business, with no $billion+ loss to the taxpayers and would be owned by shareholders instead of the UAW and Fiat. But that was Obama's priority - to pay off the unions for their campaign contributions, political quid pro quo.

I heard that last Tues Chrysler Financial announced that it had paid back its United States Government TARP loan in full. The last transaction comes six years prior to it being expected. The business was once the financial institution of automaker Chrysler LLC.And the said company owed $1.5 billion to the United States government.Yes,a very big amount of money for a debt it is.It's a good thing they were able to pay in advance. I found this here: Chrysler pays off TARP loan 6 years early.